Thursday, July 7, 2016

Bennett Jones gives training for boards in wake of dissident loss at Taseko Mines



The plan by way of U.S.-primarily based Raging River to shake matters up at Taseko Mines Ltd. might be remembered as one of the greater uncommon proxy contests to come back alongside in recent times. In mid-January, the dissident, a especially new shareholder with a five.1 in step with cent stake within the Vancouver-primarily based Taseko, proposed a two-pronged attack.

it might either try and put 4 of its nominees at the board and replace 3 incumbents thru a unique resolution at a shareholders meeting, or, thru an everyday decision, amplify the board to 12 and choose 4 of its nominees.

The twin song technique required distinctive assist ranges: two-thirds for the special decision however 50.1 in step with cent for the everyday decision.

Over the subsequent 4 months the two parties pursued the warfare — set to be determined at a mid-may additionally special assembly — with excellent gusto. The dissidents tried to create the impact they'd plenty of support; while the employer made a chain of modifications supposed to improve its governance and the rights of the minority shareholders — at the same time as its sleuthing efforts compelled the dissidents to make extra disclosure about past battles. upload in proceedings — more were mooted than filed — and the state of affairs have become even messier — before the dissidents referred to as off their plan about per week before the scheduled annual meeting mentioning lack of shareholder help.

Now a collection of attorneys at Bennett Jones have analyzed the events and the process and supplied their mind at the “essential instructions” for boards.

Written with the aid of Robert Staley, Jeffrey Kerbel, Sander Grieve and Kristopher Hanc, the report from the firm — which became not concerned within the struggle — focuses on six issues:

Be aware of how the game is played. The record said the cards are stacked in favour of the dissidents for the reason that they are able to solicit proxies from up to fifteen shareholders without issuing a round. however the company isn’t allowed a similar method till it has filed a round. “because dissidents often have talk with other shareholders before launching proxy contests, dissidents regularly declare to have giant shareholder help that might not in fact exist,” it stated.

stick with your guns. After describing Raging River’s proxy contest as “a surprise and awe campaign designed to force concessions from Taseko,” the report says boards ought to withstand “being stampeded by means of exaggerated dissident claims and competitive dissident strategies.”

consciousness at the long time. while boards can be “beaten through experienced activists and fake claims of aid,” the file stresses forums need to recall the longer-time period “strategic outcomes” and canvass shareholders to decide their level of guide “earlier than settling” with a dissident.

Get the circular out as fast as feasible. once that circular is filed, the goal is authorized to solicit proxies, gauge help for the incumbent board and test the “veracity” of the dissident’s claims of assist. by using having better statistics, the board can (then) make “a greater knowledgeable decision approximately a way to reply to a dissident attack,” said the document.

To the extent possible, get the proxy advisory corporations on aspect. acquiring that support, notes the report, “regularly proves to be a important factor in warding off a dissident, specially if the issuer has a large institutional shareholder base this is strongly encouraged by way of proxy advisory carrier recommendations.”

Be prepared to spend money and time. even though Taseko won the struggle, it got here with a $4.five million price.

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